Gas Prices Drop to Lowest Point in 10 Months, Headed Downward
PORTLAND, ME – The national average retail price for gasoline has fallen to its lowest point in more than 10 months, to $3.27 per gallon, according to a new report from Wright Express (WEX). The company said prices have fallen to as low as $2.75 in some parts of the country (New Mexico, Texas, and Oklahoma), and that they will continue to drop over the next few weeks. Gasoline demand is the least it has been since 2000, at a 4% decline from last year. WEX said analysts say the fragile economy, high unemployment numbers, and the shift toward more efficient vehicles have reduced demand.
Although this is good news for fleets looking to keep costs down, prices are still nearly 35 cents per gallon more expensive than they were at this same time in 2010. In addition, WEX said that because prices are this much higher than last year during the usual seasonal decline (prices tend to bottom out in January), when they rise again in the spring, the starting price point will be the highest it has ever been.
WEX said prices typically increase by about $1 per gallon from the winter low to the spring peak, and analysts are predicting May 2012 prices that could approach $4 per gallon.
Retail diesel prices are dropping, and wholesale prices are on their way down, too, according to WEX. The company said diesel prices will fall at a slower rate than gasoline prices, though. Diesel fuel is used most commonly around the world, and WEX said refiners are exporting large amounts of diesel, which is keeping prices from falling as quickly.
The chart below shows the range of fuel prices on a quarterly basis over the last two years.